There are eleven Articles
which comprise the Uniform Commercial Code (UCC). Article 1 of the UCC is known
as the General Provisions of the UCC. The other Articles are as follows:
Article 2, Sales; Article 2a, Leases; Article 3, Negotiable Instruments;
Article 4, Bank Deposits; Article 4a, Funds Transfers; Article 5, Letters of
Credit; Article 6, Bulk Transfers and Bulk Sales; Article 7, Warehouse
Receipts, Bills of Lading and Other Documents of Title; Article 8, Investment
Securities; and Article 9, Secured Transactions.
In 2003, Article 2 and
Article 7 were modernized in a major revision, though the revisions to Article
2 have not been adopted by any states yet. Although Article 6 is considered
obsolete by the National Conference of Commissioners on Uniform State Laws, it
remains in effect in many jurisdictions.
Despite being present in one
document, each Article of the UCC bears only the slightest connection to any
other. Most articles bear little relevance on the others.
The exception is that each Article uses terms defined in Article 1
and Article 9 covers the paperwork required to support the intermediate
The Uniform Commercial Code (UCC) was first published in 1952. These Uniform Commercial Codes represented an attempt to provide an increasingly interconnected system of interstate commerce with a more uniform legal system to govern these interactions.
Uniform Commercial Codes became more essential as it became commonplace for a single transaction to involve goods which may have produced in Minnesota, stored in a warehouse in Illinois, purchased by a company headquartered in Texas, and delivered to a store from in Maine. Besides involving the transfer of ownership in each of these jurisdictions, the goods in this example would have also been affected by the laws of several jurisdictions while in transit.
Before the development of the Uniform Commercial Code, the transaction above could have been subjected to as many as fifteen separate and distinct instances of taxes. Taxes for goods crossing intra-national borders contributed to rising sales prices. The development of Uniform Commercial Codes was seen as an attempt to keep prices under control within the United States and to promote domestic production and consumption of American goods.
The Uniform Commercial Code is not a law in and of itself. Instead it is meant to serve as a guide for individual states seeking to devise their own commercial laws. The Uniform Commercial Code may be adopted exactly as they are written or may be adapted so as to be in accord with the individual traditions of the State. Unless the changes are very minor, the goal of establishing a set of Uniform Commercial Codes will be defeated.
California has enacted the Uniform Commercial Codes with only a minor change. The Uniform Commercial Code exchanges the word “article” for the word “division” in order to maintain its normal naming structure for its codes. California also uses a different punctuation system for the Uniform Commercial Codes because while the Uniform Commercial Code uses hyphens to denote section numbers, California law codes only permit the use of hyphens to denote instances when a succession of laws is being discussed. California does not provide an alternate punctuation, electing to simply drop the hyphens. Arkansas substitutes “chapters” for “articles” since articles are only used in that State to refer to sections of the State Constitution.
When the time came to adopt the Uniform Commercial Code, Louisiana made substantial changes to the Uniform Commercial Codes which prevents the Code from having truly universal adoption. It made the same minor change that Arkansas did, renaming “articles” as “chapters.” However, it also elected to make a more substantial change: Louisiana decided against adopting Article Two in favor of continuing its civil law tradition in regards to selling goods. It has, however, adopted the other ten Uniform Commercial Codes.